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The question Roger is when/if they can turn the corner from explorer to producer. That’s a game changer. All explorers on AIM exist solely on placings, so that’s always been a certainty. No-one would ever invest in AIM if they were worried about placements. If they have proven reserves, mining licences and gas flowing to market there are other options (debt, forward selling, JVs etc). At that point past record becomes less relevant, different game. Agree there’s still considerable risk but they’re getting closer to turning that corner than they’ve ever been, if operations go to plan. Hopefully SP will rise with the stream of news now due, and no-one who’s invested here now is going to worry about raising at 3p in 2025 if needed.

She’s also has exactly the skill set, investment contacts and experience necessary to survive as an AIM listed company. Former NOMAD, being a shark in the shark pool is better than a minnow. Brutal but it works.

Which bit do you disagree with?

The pre drill reserve estimates for Itumbula were 5.4bcf with a P50 recoverable estimate of 1bcf. That was before tapping the novel fractured basement system, which may alter those assumptions (but in a way that’s also difficult to value with traditional models).

If the Colorado project goes to plan then likelihood of a placement in Q1 2025 is greatly reduced. If it doesn’t proceed then HE1 will have more than 12 months cash in the bank from the last raise to make a start on the Rukwa project.

As stated by the company there will at some point be a competent person’s report (CPR) to independently attest and value the scale of the discovery at Rukwa. Assuming there’s also a mining licence and then an SPV, the CPR will form the basis for financial backers and market valuations. Until we see it the investment remains prospective, which is fine, one step at a time, risk-reward etc.

I think the market will gain confidence if the project acquisition goes ahead at the end of the month (if ENL get their permits and the rest of the DD turns out OK). Hopefully they can confirm that at the US helium summit the day before.

If ENL’s ECMC hearing goes well on Wednesday then the news train should leave the station shortly after, next stop helium summit and conclusion of the acquisition 🚂 Let’s hope they make a good presentation of the project

Normally, you can watch these public hearings live streamed at

ECMC hearings are available on YouTube at following link:

https://www.youtube.com/channel/UC85gdSA3EWoxH1kzjE-USbw

Here’s the agenda for the Colorado regulatory hearing next Wednesday. BNL’s Development Plan for helium production is slated for discussion at 11.35am (after close of UK trading). Approval is a condition for conclusion of HE1’s acquisition.

https://ecmc.state.co.us/documents/reg/Hearings/Schedules/Agendas/2024/20241016_HearingAgenda_20241009_Preliminary.pdf

“The mission of the Colorado Energy & Management Carbon Commission (ECMC) is to regulate the development and production of the natural resources of oil and gas in the state of Colorado in a manner that protects public health, safety, welfare, the environment and wildlife resources.“

Great, so this literally says what you filtered me for saying. Doesn’t that seem a bit odd?

The company applies for an ML

The government then awards either an ML or an SML, depending on the total value of investment needed

A Project company is then established after the licence is awarded

The licence is then transferred to the SPV

The SPV then applies to the banks for finance

The financial model is then agreed with the government

It seems a very clear sequence of events. The finance cannot and will not be announced either prior to, or at the same time as, the licence award. Anyone posting here to the contrary is raising false news timelines. They may announce that they are in discussion with potential founders but they simply cannot announce any conclusion of funding until the SPV is established and the government has agreed to the finance terms.

Skippy makes well reasoned and contextualised posts, if you’re filtering him as well that’s pretty telling

And this is precisely how echo chambers are created. Filter everyone who wants to discuss anything evidential and clear the board for sentiment driven traders to either ramp or deramp.

Hemo, sorry if that wasn’t clear but it’s explicit in the condition of applying for an ML/SML, total investment over the licence period (ML under $100m, SML over $100m, including capex and opex).

I can only go from the estimates published by the company and the comments they’ve made since. As you say, there may be a phased/incremental development plan (as for Colorado) with initial development leading to scale up. Overall, I’d be amazed if the total project investment over the ML lifetime was much under $100m. Happy to be proved wrong.

The original development plan for Tai-Itumbula came in at $94m for 6 wells, gathering and modular production plant. Since then we know they have increased the model to 20-30 wells, but acquired their own drill rig, and been surprised by the low cost of plant (according to CFO comments). But it has to be somewhere in that broad ball park around $100m, give or take a wide margin.

I don’t think details of the actual project financing are a necessary part of the ML application but the feasibility of finance is. This is judged on the applicant’s ‘financial capability’, which I believe is evidenced by the applicant’s proven ‘track record’ (which as a London listed company with multi million capital raises they will have clearly shown). If I’ve missed something in the licence conditions let me know.

“there will be a requirement at some stage going forward for further finance but we certainly won’t be able to conclude on that until we have that mining licence or that development licence granted by the government… We’ll certainly be engaging with the larger banks and the helium off takers once we’re comfortable with our feasibility study.”

So it’s certainly possible that they are making approaches with a view to concluding any deals after award of the ML.

https://youtu.be/s7T5h4qi28c?t=459

They said in interview they won’t be approaching finance until after they have the ML, when they plan to approach ‘major banks’ and ‘off takers’. That makes sense as no-one is going to sign off any kind of finance without an ML in place. However, they have also said on one or two occasions over the past couple of years they had preliminary discussions with potential off takers or JV partners.

I have tried not to express anything as fact by using the words ‘hoped for’ and ‘seems most likely’..